Economic Revision Grade 9

A government wishes to increase agricultural output. It gives farmers the tools to irrigate the farmers’ fields. Which factors of production are provided by the farmers?

• capital and enterprise

• capital and labour

• labour and land

• land and capital

In recent years more golf courses, which use large quantities of water, have opened in China.

What may be the opportunity cost of this?

• cost of water

• loss of farmland

• sales of golf equipment

• wages of golf course staff

Air travel and rail travel are substitute forms of transport. The diagram shows the effect of new technology on the market for air travel.

What would be the most likely effect on the market for rail transport?

• a decrease in demand for rail transport

• an increase in the price of rail tickets

• an increase in supply of rail transport

• an increase in the total income of rail companies

What can cause the supply curve for a product to shift to the right?

• a fall in the population

• an increase in government subsidies to producers

• an increase in indirect taxes on the product

• an increase in the costs of production

Which pair of economic institutions can be found in a market economy?

• local government and charities

• monopolies and commercial banks

• government owned industries and organisations

• stock exchange and public corporations

What is an example of the purchase of a consumer good?

• A farm owner buys a television.

• A farm owner buys additional land.

• A farm owner buys fertiliser for their crops.

• A farm owner buys some farming equipment.

What would be classified as the factor of production capital for an airline?

• the aircraft operated by the airline

• the money the airline keeps in the bank

• the pilots the airline uses

• the owners of the airlines

The diagram shows the market for beef in the US with the original equilibrium at X.

What will be the new equilibrium position if incomes in the US rise?

• A

• B

• C

• D

The diagram shows the supply curve for a good.

What is the price elasticity of supply when the price rises from $2 to $4?

• 0.2

• 0.5

• 1

• 2

The table shows government estimates of the private and external benefits and costs of building a new dam.

What is the difference between the social benefits and social costs of building the dam?

• $25 million

• $50 million

• $175 million

• $225 million